Housing Permits Jump 10.1% in August

(Neutral) There were 107,000 housing permits filed in August 2016. In three of the last four months, permits were above 100,000. While the number of permits was still relaitvely low looking back over the last four decades, the level permits is almost the higherst since 2007. Comapred with one year ago, housing permits decreased 10.1 percent, which was the first month of growth since March. The annual rate of growth accelerated to 2.3 percent, which was the first month of accelerating growth since February. 

The change in the real 10-year treasury rate was negative for the fourth month in a row, while the overall trend of lower rates has been in place since the end of 2015. This is a likely cause for the increase in housing permits in August. Changes in the interest rate lead changes in housing permits and construction spending by about 12 months on average.

We use housing permits as an early leading indicator for the following industries: appliances; custom processors; furniture; hardware; HVAC; off-road/construction machinery; petrochemical processors; plastics; plastic/rubber products; pumps/valves/plumbing products; textiles/clothing/leather goods; and wood/paper products.